lpUSD & lpMPX
Definitions
LP - lpUSD or lpMPX
RR - Reward rate
Importance of Stake Liquidity
Staking liquidity, particularly in XUSD/eMPX and XUSD/USDT pools, aims to attract more liquidity providers. By incentivizing liquidity provision through LP tokens, the Foundation stimulates activity, making it more convenient for users to utilize stable liquidity pools with high Total Value Locked (TVL) and consequently low price impact. Foundation interests lie in encouraging LP holders to continue holding their assets in pools to minimize the risk of sudden price changes and maintain liquidity. In return, asset holders receive significant rewards that automatically increase over time based on the duration of stake, the quantity of staked tokens, and accrued rewards.
XUSD
XUSD is an algorithmic stablecoin pegged to the USD, deployed on the CrossFi Chain. It’s designed to maintain a 1:1 peg with USD through a collateralization mechanism. Users mint XUSD by collateralizing at least 300% of the desired amount in XFI (Native Currency). These minted XUSDs can be used for various purposes such as asset storage, purchasing other tokens, etc. If a user’s collateralization position becomes unhealthy, with the price of XFI dropping below 200% of the minted XUSD amount, the position is liquidated, using collateralized XFIs to pay for XUSD and liquidation fees.
Acquiring lpUSD and lpMPX
Users acquire lpUSD or lpMPX tokens by staking their liquidity into the respective XUSD/USDT or XUSD/eMPX liquidity pools’ smart contracts. This can be done through the ”Get” section in the XApp by selecting the liquidity Addition menu and the corresponding tokens. Once users stake their liquidity, they receive LP tokens representing their share of the pool, entitling them to a portion of the rewards generated by the pool’s activity.
Rewards Distribution
The distribution of rewards is directly tied to the quantity of LP tokens staked and the duration of stake, multiplied by the Reward Rate, in relation to the total supply of staked tokens. Rewards are calculated in XFI from the staking contract’s balance. Users can claim their rewards in XFI without affecting their ability to continue receiving new rewards. It’s important to note that the Annual Percentage Rate (APR) and reward calculation are dependent on every withdrawal and stake action performed by users. This ensures that rewards are recalculated based on the most up-to-date information available, taking into account changes in the staked LPs and other relevant factors. The total number of staked LPs is counted on the contract and distributed among all stakers accordingly. This ensures that users are fairly rewarded for their contribution to the liquidity pools, encouraging continued participation and liquidity provision.
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Liquidity Mining Goal and APR Formula
The objective of the Liquidity Provision Liquidity Mining program is to enable eMPX to achieve a higher Annual Percentage Rate (APR) compared to the native MPX. This initiative empowers users to effortlessly obtain XFI rewards and seamlessly convert them back to eMPX, thereby fostering a compound effect within the application at the touch of a finger. By incentivizing liquidity provision in the XUSD/eMPX and XUSD/USDT pools, the program aims to attract more liquidity providers, enhancing the overall liquidity of these pools and ensuring a robust and sustainable ecosystem within the CrossFi Chain.
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